Chapter 01 Imperatives for a Market-Driven Strategy

Chapter 01 - Imperatives for a Market-Driven Strategy1-10Chapter 01Imperatives for a Market-Driven Strategy

True / False Questions1.(p.4)For companies that are becoming market oriented the skills of top management only are required.FALSE

Difficulty: Moderate2.(p.5)All the major components of distinctive capabilities are organizational processes and assets.FALSE

Difficulty: Easy3.(p.7)Superior customer value results from a very favorable use experience of the customer compared to expectations of the customer and the value offerings of competitors.TRUE

Difficulty: Easy4.(p.10)Corporate strategy consists of the decisions made by top-management and the resulting actions taken to achieve the objectives set for the corporation.TRUE

Difficulty: Easy

5.(p.12)A strategic business unit (SBU) is a cohesive organizational unit that is separately managed, incurs costs and, does not generate sales.FALSE

Difficulty: Moderate6.(p.13)Strategic marketing links the company with the environment and marketing is the responsibility of the entire business.TRUE

Difficulty: Challenging7.(p.14)A product-market consists of a specific product or product line that can satisfy a set of needs and wants for the people willing and able to purchase it.TRUE

Difficulty: Moderate8.(p.14)The objective of strategic market segmentation is to identify segments within the product-market of interest.TRUE

Difficulty: Moderate9.(p.14)Customer relationship management does not emphasize delivering superior customer value.FALSE

Difficulty: Challenging

10.(p.15)The purpose of market targeting strategy is to select people or organizations that management wishes to serve in the product-market.TRUE

Difficulty: Easy

Multiple Choice Questions11.(p.4)_____ is more than a philosophy since it consists of a process for delivering customer value.A.Market orientationB.Competitor intelligenceC.Cross-functional coordinationD.Distinctive capabilities

Difficulty: Moderate12.(p.4)Answering the questions 'which competitors, what technologies and how customers perceive being satisfied' comes from _____.A.Market orientationB.Competitor intelligenceC.Cross-functional coordinationD.Distinctive capabilities

Difficulty: Easy13.(p.4)Getting all business functions working together to provide superior customer value is _____.A.Market orientationB.Competitor intelligenceC.Cross-functional coordinationD.Distinctive capabilities

Difficulty: Easy

14.(p.5)_____ is/are a bundle(s) of knowledge that enables firms to make use of their assets.A.Market orientationB.Competitor intelligenceC.Cross-functional coordinationD.Distinctive capabilities

Difficulty: Moderate15.(p.7)_____ consist(s) of the benefits and costs resulting from the purchase and use of products as perceived by the buyer.A.Customer ValueB.Distinctive capabilitiesC.Customer linkingD.Customer Relationships

Difficulty: Easy16.(p.9)_____ consist(s) of deciding the scope and purpose of the business, the objectives and the resources necessary to achieve the objectives.A.Corporate strategyB.Business and marketing strategyC.Market sensingD.Customer relationship management

Difficulty: Easy17.(p.11)What defines the corporation and what provides guidelines for managing the corporation is _____.A.Corporate strategyB.Business and marketing strategyC.Corporate visionD.Customer relationship management

Difficulty: Easy

18.(p.11)The _____ is/are set at several levels of the company and includes the time frame necessary for strategic change.A.Corporate strategyB.Business and marketing strategyC.Corporate visionD.Corporate objectives

Difficulty: Moderate19.(p.13)The focus of _____ is on organizational performance rather than a primary concern about increasing sales.A.Corporate strategyB.Strategic marketingC.Corporate visionD.Corporate objectives

Difficulty: Moderate20.(p.14)_____ offers a company the opportunity to focus its business on the requirements of one or more groups of buyers.A.Corporate strategyB.Strategic marketingC.Market segmentationD.Corporate responsiveness

Difficulty: Moderate21.(p.14)A _____ is described by characteristics of people including why they buy and their preferences for brands of products.A.Customer relationship management systemB.Strategic marketing objectiveC.Market segmentD.Corporate capability

Difficulty: Moderate

22.(p.14)A(n) _____ is formed according to the type of industry or the uses of the product.A.Customer relationship management systemB.Strategic marketing objectiveC.Industrial market segmentD.Corporate capability

Difficulty: Moderate23.(p.14)_____ emphasizes delivering superior customer value by personalizing the interaction between the customer and the company.A.Customer relationship managementB.Strategic marketingC.Market segmentationD.Corporate positioning

Difficulty: Moderate24.(p.14)When a company decides what organizations it wishes to serve in the product-market, the company is engaged in choosing the _____.A.Customer relationship managementB.Strategic marketingC.Market targetD.Corporate positioning

Difficulty: Moderate25.(p.15)A company that is deciding the _____ objectives is likely to include the level of sales they wish to achieve.A.Customer relationship managementB.Strategic marketingC.Market targetD.Corporate positioning

Difficulty: Challenging

26.(p.15)A _____ is the combination of the product, value chain, price and promotion strategies a firm uses to position itself against its competitors in meeting the needs of a market target.A.Customer relationship strategyB.Strategic marketC.Market targetD.Positioning strategy

Difficulty: Easy27.(p.15)A _____ seeks to have the brand own a place in the eyes and mind of the buyer and the product be distinguished from the products of the competition.A.Customer relationship strategyB.Strategic marketC.Market targetD.Positioning strategy

Difficulty: Moderate28.(p.15)The product, distribution, price and promotion strategy components are used to influence the buyers' _____ of the brand.A.Relationship strategyB.IdeaC.Market targetD.Positioning

Difficulty: Challenging29.(p.16)The product, distribution, price and promotion strategy components are the marketing _____.A.RelationshipB.IdeaC.TargetD.Mix

Difficulty: Easy

30.(p.17)Companies will use a _____ to contact and deliver product to the market target buyers.A.Product strategyB.New idea strategyC.Value-chain strategyD.Relationship strategy

Difficulty: Challenging

Essay Questions31.(p.7)Discuss how customers perceive value and how companies deliver customer value.Intense global competition and the increasing demands of ever-more sophisticated customers make the creation of customer value an important challenge for managers. Offering superior customer value is at the core of business design. Buyers form value expectations and decide to purchase goods and services based on their perceptions of products' benefits less the total costs incurred. Customer satisfaction indicates how well the product use experience compares to the buyer's value expectations. Superior customer value results from a very favorable use experience compared to expectations and the value offerings of competitors. The organization's distinctive capabilities are used to deliver value by differentiating the product offer, offering lower prices relative to competing brands or a combination of lower cost and differentiation. Deciding which avenue to follow requires matching capabilities to the best value opportunities.

Difficulty: Moderate

32.(p.7)Explain the logic of pursuing a market-driven strategy.Becoming more market oriented, leveraging the distinctive capabilities and finding a good match between customers' value requirements and the organization's capabilities is important for companies. The supporting logic for these actions is that they are expected to lead to superior customer value and organizational performance. Research evidence indicates that these characteristics are present in market-driven organizations, which display higher performance than their counterparts that are not market driven. A market-driven organization must identify which capabilities to develop and which investment commitments to make. Market orientation research and evolving business strategy paradigms point to the importance of market sensing and customer linking capabilities in achieving successful market-driven strategies.

Difficulty: Moderate33.(p.8)What is the relationship between the corporate strategy and the business and marketing strategies?The relationship between corporate, business and marketing strategy is as follows. Corporate strategy consists of deciding the scope and purpose of the business, its objectives and the initiatives and resources necessary to achieve the objectives. Business and marketing strategy is guided by the decisions top management makes about how, when and where to compete. This should be a two-way relationship while corporate strategy defines strategic direction, allocates resources and defines constraints on what cannot be done, executives responsible for marketing strategy have a responsibility to inform corporate strategists about external change in the market that identifies opportunities and threats.

Difficulty: Challenging

34.(p.15)Discuss the role of market targeting in the company's marketing strategy.A core issue is deciding how, when and where to compete, given a firm's market and competitive environment. The purpose of market targeting strategy is to select the people (or organizations) that management wishes to serve in the product-market. When buyers' needs and wants vary, the market target is usually one or more segments of the product-market. Once the segments are identified and their relative importance to the firm determined, the targeting strategy is selected. The objective is to find the best match between the value requirements of each segment and the organization's distinctive capabilities. The targeting decision is the focal point of marketing strategy since targeting guides the setting of objectives and developing a positioning strategy. Examples of market target objectives are desired levels of sales, market share, customer retention, profit contribution and customer satisfaction.

Difficulty: Moderate35.(p.15)Discuss the role of positioning strategy in the company's marketing strategy.Positioning strategy is the combination of product, value chain, price and promotion strategies a firm uses to position itself against its key competitors in meeting the needs and wants of the market target. The strategies and tactics used to gain a favorable position are called the marketing mix or the marketing program. The positioning strategy seeks to position the brand in the eyes and mind of the buyer and distinguish the product from the competition. The product, distribution, price and promotion strategy components make up a bundle of actions that are used to influence buyers' positioning of a brand.

Difficulty: Moderate